S&P 500 Advance Might Elevate Nikkei 225, Merchants Eyeing Jackson Gap

S&P 500, NIKKEI 225, ASX 200 WEEKLY OUTLOOK:

• Dow Jones, S&P 500 and Nasdaq 100 indexes closed +0.65%, +0.52% and +1.06% respectively
• Jackson Gap symposium might be in focus this week, with merchants eyeing Fed tapering
• Asia-Pacific futures are pointing to a constructive begin of the week

Wall Avenue Rally, Jackson Gap, US Greenback – Asia-Pacific Week-Forward:

The S&P 500 index rebounded on Friday as traders took the current selloff on Wall Avenue as a possibility to build up extra. Fairness merchants might be eyeing this week’s Jackson Gap symposium for clues in regards to the Fed’s subsequent transfer. The newest FOMC assembly minutes signaled {that a} majority of Fed members help an concept to cut back the $120 billion per thirty days asset buying by the tip of this yr. Fed Chair Jerome Powell’s speech on Friday might strengthen this prospect, albeit the current financial information confirmed indicators of a slowing restoration.

Towards this backdrop, the DXY US Greenback index breached above a “Wedge” sample it traded inside for the final 12 months (chart beneath). This means that market has began to cost in tapering stimulus and maybe charge hikes within the longer horizon. A stronger US Greenback might exert downward stress on commodity costs and weigh on rising market property.

DXY US Greenback Index

APAC markets look set to kick off the week on the entrance foot. Futures had been greater in Japan, Hong Kong, Australia, Taiwan, Singapore, India and Thailand. These in mainland China and South Korea are within the crimson nevertheless.

Japan’s Nikkei 225 index has misplaced over 11% since February because the nation struggles to struggle towards the unfold of the extremely contagious Delta variant of Covid-19. There appears to be additional draw back threat amid issues over whether or not the worldwide financial restoration from the pandemic has already peaked.

For the week forward, US sturdy items orders and core PCE inflation information dominate the financial docket this week alongside the Jackson Gap symposium. Discover out extra from the DailyFX calendar.

Wanting again to Friday’s shut, all 11 S&P 500 sectors ended greater, with 81.8% of the index’s constituents closing within the inexperienced. Data expertise (+1.3%), utilities (+1.22%) and communication providers (+0.96%) had been among the many greatest performers, whereas client staples (+0.18%) and industrials (+0.24%) trailed behind.

S&P 500 Sector Efficiency 20-08-2021

Supply: Bloomberg, DailyFX

S&P 500 Index Technical Evaluation

The S&P 500 index prolonged greater to problem all-time highs. The general bullish development stays intact as prompt by the “Ascending Channel”. The following resistance stage might be discovered at 4,650 – the 161.8% Fibonacci extension. A pullback might result in a check of the 20- and 50-day SMA traces for instant help.

S&P 500 Index – Every day Chart

Grasp Seng Index Technical Evaluation:

The Grasp Seng Index (HSI) breached beneath the ground of an “Ascending Channel”, as highlighted within the chart beneath, hinting at additional losses. Costs are testing a right away help stage at 24,850. Holding above this stage might pave the way in which for a technical rebound. The MACD indicator stays beneath the impartial midpoint, underscoring bearish momentum.

Grasp Seng Index – Every day Chart

ASX 200 Index Technical Evaluation:

The ASX 200 index pulled again sharply to check a right away help stage at 7,500 – the earlier resistance. The general development stays bullish-biased, as prompt by the consecutive greater highs and better lows fashioned over the previous few months. The MACD indicator fashioned a bearish crossover after hitting trendline resistance, suggesting that promoting stress could also be prevailing.

ASX 200 Index – Every day Chart

— Written by Margaret Yang, Strategist for DailyFX.com

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